Background
The Foreign Contribution (Regulation) Act, 2010 (FCRA) was enacted to regulate the acceptance and utilization of foreign contributions or foreign hospitality by individuals, associations, and organizations in India. Its primary purpose is to ensure that foreign funds are used for legitimate purposes, such as social, cultural, educational, and developmental activities, and not for activities detrimental to national interest, security, or public welfare.
Applicability
The Act applies to all associations, non-governmental organizations (NGOs), companies, and individuals who receive foreign contributions. Any entity seeking to receive foreign donations must register under the FCRA or obtain prior permission from the government. It also governs the procedures for maintaining accounts, reporting, and auditing to ensure transparency and accountability in the use of foreign funds.
Compliance Requirements under Foreign Contribution (Regulation) Act, 2010 in Accordance with the Rules
A person receiving foreign contribution in a quarter of the financial year shall place details of foreign contribution received on its official website or on the website as specified by the Central Government within 15 days following the last day of the quarter in which it has been received clearly indicating the details of donors, amount received and date of receipt
An application for certificate of registration by a person under sub-section (1) of section 11, for acceptance of foreign contribution shall be made in electronic form in Form FC-3A with an affidavit executed by each office bearer and key functionary and member in Proforma ‘AA’ appended to Foreign Contribution (Regulation) Rules, 2011
A person who has been granted a certificate of registration or prior permission shall place the audited statement of accounts on receipts and utilisation of the foreign contribution, including income and expenditure statement, receipt and payment account and balance sheet for every financial year beginning on the first day of April within nine months of the closure of the financial year on its official website or on the website as specified by the Central Government
Every person who has been granted registration or prior permission under Foreign Contribution (Regulation) Act, 2010 shall maintain a separate set of accounts and records, exclusively, for the foreign contribution received and utilised.
Every bank shall report to the Central Government within forty-eight hours any transaction in respect of receipt or utilisation of any foreign contribution by any person whether or not such person is registered or granted prior permission under the Act
Every person who receives foreign contribution under the Act, shall submit a signed or digitally signed report electronically online in Form FC-4 with scanned copies of income and expenditure statement, receipt and payment account and balance sheet for every financial year beginning on 1st April within 9 months of the closure of the financial year
A person who has been granted a certificate of registration or prior permission under section 11 of the Act shall intimate electronically online in Form FC-6. within fifteen days of any change in the details for which Certificate of Registration or Prior Permission was obtained
A person who has been granted a certificate of registration or prior permission under section 11 of the Act shall intimate electronically online in Form FC-6. within fifteen days, of any change in the following, namely: –
(i) name of the association or its address within the State for which registration/ prior permission has been granted under the Act;
(ii) its nature, aims and objects and registration with local/relevant authorities,;
(iii) bank and/or branch of the bank and/or designated foreign contribution account number; and
(iv) key members of the association if at any point of time such change causes replacement of fifty percent or more of the original key members as reported in the application for grant of registration/ prior permission/ renewal of registration under the Act.
Penalties & Punishments
Conclusion
The FCRA provides a structured framework for the lawful receipt and use of foreign contributions in India. By regulating foreign funding, it aims to promote accountability, prevent misuse of resources, and safeguard national interests while enabling legitimate social, charitable, and developmental initiatives to thrive.
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